Leveraging up in China 12M Price Target SGD 0.58 (+29%) Previous Price Target SGD 0.58

March 3, 2016

Jumbo Group Ltd (JUMBO SP) BUY Share Price SGD 0.45 Leveraging Up In China 12m Price Target SGD 0.58 (+29%) Previous Price Target SGD 0.58

Reiterate Buy Company description F&B retailer in Singapore and China, most famous for We remain bullish on Jumbo, especially as all indications are for a its chilli crabs and JUMBO Seafood brand. Has five surging China business this quarter. Our analysis of its IAPM outlet other brands in its stable. suggests strong operating leverage that should increasingly be in Jumbo’s favour and should show up in the numbers soon. Despite two new outlets, China only had a small loss in 1Q16. With strong sales so far in Statistics 2Q16, it could be in the black as soon as this quarter. Reiterate BUY on 52w high/low (SGD) 0.49/0.41 Jumbo, with TP of SGD0.58, based on a blended PE/DCF methodology. 3m avg turnover (USDm) 2.2 Free float (%) 24.3 Operating Leverage In Jumbo’s Favour Issued shares (m) 641

Market capitalisation SGD282.2M ConsumerStaples We expect operating leverage to work to Jumbo’s advantage in China in USD202M coming years. We estimate IAPM’s operating leverage to be 3.3x. In other Major shareholders: words, every 10% rise in sales will lead to 33% higher profits. All JBO Holdings 57.9% indications now are of a buoyant topline. As sales ramp up, the high Mr Tan Gee Jian 6.6% operating leverage will lead to rising profits for every incremental dollar Orchid 1 Investments 6.2%

of sales. This means Jumbo’s potential to outperform is very high. Price Performance 0.480 180 China Could Be In The Black This Quarter 0.460 170 Despite having two brand-new outlets, China only posted a small loss of 0.440 160 Singapore c.SGD100k in 1Q16 as IAPM alone was able to almost cover their start-up 0.420 150 costs. With management reporting strong sales over CNY and most 0.400 140 0.380 130 critically — even after CNY ended — for all three outlets, China could 0.360 120 turn profitable as soon as 2Q16. This will be a key catalyst to look out for 0.340 110 when they report 2Q results. 0.320 100 0.300 90 IFC Outlet Delivering On Bullish Expectations Nov-15 Nov-15 Dec-15 Jan-16 Feb-16 Feb-16 Management reported that the latest IFC Mall outlet in Pudong, which Jumbo Group Ltd - (LHS, SGD) Jumbo Group Ltd / Straits Times Index - (RHS, %) opened before CNY, is full-house even post-CNY and on weekends as -1M -3M -12M well. More critically, average bill per diner at this outlet is CNY368, 10% Absolute (%) 6 5 na higher than IAPM Mall and 35% higher than Raffles City, as we expected. Relative to index (%) (1) 11 na We are encouraged by IFC’s direction and continue to expect a relatively Source: FactSet

shorter time to profitability for it.

FYE Sep (SGD m) FY14A FY15A FY16E FY17E FY18E Revenue 112 123 143 156 174 EBITDA 19 18 22 24 29 Core net profit 13 14 15 17 20 Core EPS (cts) 2.1 2.1 2.3 2.6 3.1 Core EPS growth (%) 39.8 3.0 8.3 11.6 21.3 Net DPS (cts) 0.0 8.1 0.7 0.8 0.9 Core P/E (x) 21.6 21.0 19.4 17.4 14.3 P/BV (x) 6.1 5.1 4.6 3.9 3.2 Net dividend yield (%) 0.0 17.9 1.5 1.7 2.1 ROAE (%) 31.8 26.4 24.9 24.2 24.5 ROAA (%) 20.8 17.8 16.9 16.7 17.3 EV/EBITDA (x) na na 10.7 9.8 7.8 Net debt/equity (%) net cash net cash net cash net cash net cash Consensus net profit - - na na na MKE vs. Consensus (%) - - na na na

Gregory Yap [email protected] (65) 6231 5848

SEE PAGE 9 FOR IMPORTANT DISCLOSURES AND ANALYST CERTIFICATIONS Co. Reg No: 198700034E MICA (P) : 099/03/2012 Jumbo Group Ltd

1. Year-Round High Season In China

1.1 Operating Leverage Should Work to Jumbo’s Advantage… As Jumbo’s China outlets ramp up and turn increasingly mature, we think profits will start to benefit exponentially from the high fixed cost base. This is due to its high degree of operating leverage. Using the IAPM Mall outlet as an example, which is Jumbo’s only mature outlet at this stage of its expansion into China, Jumbo earns a large variable profit of 55% on each incremental dollar of sales, but must achieve sufficient sales to cover its substantial fixed costs. If it can do so, it will start to earn a major profit on all sales once it has paid for its fixed costs, which are estimated to account for 38% of revenue. We calculate IAPM’s operating leverage to be 3.3x. In other words, every 10% rise in revenue results in a 33% increase in profits.

Figure 1: Operating leverage of IAPM Mall outlet is 3.3x. In other words, every 10% rise in revenue raises profit by 33% FY15 suggests For FY16, we assumed CNY300 bill/diner CNY335 bill/diner (+12%) CNY335 bill/diner CNY335 bill/diner (CNY’000) & 1.8 turns/night & 2 turns/night & 2.5 turns/night & 3 turns/night Revenue 49,176 60,300 75,375 90,450 YoY % chg from FY15 +23% +53% +84%

Variable costs: (22,129) (27,135) (33,919) (40,703) - Food costs (14,753) (18,090) (22,613) (27,135) - Utilities cost (2,459) (3,015) (3,769) (4,523) - Other opex (4,918) (6,030) (7,538) (9,045) Contribution margin 27,047 33,165 41,456 49,748 As % of revenue 55% 55% 55% 55% Fixed costs: (18,817) (18,817) (18,817) (18,817) As % of revenue 38% 31% 25% 21% - Depreciation (1,567) (1,567) (1,567) (1,567) - Rental costs (16,170) (16,170) (16,170) (16,170) - Staff costs (1,080) (1,080) (1,080) (1,080) EBIT 8,230 14,348 22,639 30,930 YoY % chg from FY15 +74% +175% +276%

Operating leverage is contribution margin divided by EBIT. Detailed model in Appendix A. Source: Company data, Maybank Kim Eng

1.2 …And Raises The Potential To Beat Forecasts The high operating leverage means that it will not take much for Jumbo to potentially exceed our forecasts, by our estimates. We currently forecast China will contribute c.SGD2m to pretax profits in FY16, with IAPM to account for 64% or SGD1.4m, based on an average bill/diner of SGD71/CNY335, +12% from FY15’s SGD65/CNY300 as indicated by management. FY15 data also suggested an average nightly turn of 1.8 diners per seat. We have assumed 2 turns in FY16.

However, if Jumbo is able to raise its seat turns to 2.5x, IAPM’s profit alone could exceed SGD2m in FY16E, and if the other two outlets also turn profitable within FY16 as we expect, Jumbo’s China business could beat our forecasts. According to management, IAPM’s seat-turns are higher than Singapore’s, especially since it is located in a late-night mall where shops stay open till 11pm and restaurants only close at midnight or later.

Figure 2: High operating leverage in China could help Jumbo beat forecasts (SGD’000) 2016E % of FY16E forecast Forecasted China profit contributions from all three outlets 2,144 IAPM outlet alone - assume CNY335 bill/diner, 2 turns/night 1,374 64% IAPM outlet alone - assume CNY335 bill/diner, 2.5 turns/night 2,168 101% IAPM outlet alone - assume CNY335 bill/diner, 3 turns/night 2,961 138%

Source: Maybank Kim Eng

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1.3 Look Out For More China Traction in 2Q As such, we think there is a good chance that China could turn profitable as a whole in 2Q16 for Jumbo. At the least, it should be very close to breaking even. Already in 1Q16, the China operations turned in SGD3.1m in revenue (+79% YoY) and lost only c.SGD100k. And this was with just the one profitable outlet at IAPM Mall supporting the start-up and pre-operating costs of two new outlets in Raffles City Shanghai and IFC Mall Pudong, which opened in Aug 2015 and Jan 2016 respectively. IFC Mall’s pre-operating cost alone was c.SGD200k in 1Q16. All three outlets have continued to do well so far in 2Q16. IFC Mall opened two weeks before CNY to take full advantage of the festive demand. We understand that business has remained strong even after CNY ended. We reiterate that we expect a relatively shorter time to profitability for IFC due to the higher spending power of its target market, which are business diners. According to management, IFC was full-house even on weekends.

On www.dianping.com (China’s equivalent of www.hungrygowhere.com, a popular Singapore food review website), we note that the average customer review of all three Shanghai outlets has remained in five-star territory and the number of reviews has risen significantly since our initiation in early Jan. IFC Mall, despite being opened for only a short time, has already garnered 124 reviews. Further, its average per pax spend is CNY368, according to dianping, higher than Raffles City’s CNY272 and IAPM’s CNY334, which is as we had expected since the IFC outlet caters to the bigger-wallet business crowd.

Figure 3: Jumbo IFC Mall – 5 stars / 124 reviews / CNY368 bill/diner - 10% higher than IAPM and 35% higher than Raffles City

Source: http://www.dianping.com/shop/57490660

Figure 4: Jumbo IAPM – CNY334 bill/diner Figure 5: Jumbo Raffles City – CNY272 bill/diner 5 stars / 3,975 reviews +8% from end-Dec 2015 5 stars / 1,837 reviews +65% from 1,117 at end-Dec 2015

Source: http://www.dianping.com/shop/13784702 Source: http://www.dianping.com/shop/24996989

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Appendix A

Figure 6: IAPM Mall outlet - case study FY16 assumed FY15 suggests CNY335 bill/diner CNY300 bill/diner (+12%) CNY335 bill/diner CNY335 bill/diner & 1.8 turns/night & 2 turns/night & 2.5 turns/night & 3 turns/night Remarks Revenue (SGD'000) 10,463 12,830 16,037 19,245

YoY % chg from FY15 23% 53% 84%

Revenue (CNY'000) 49,176 60,300 75,375 90,450

- Revenue/seat/month (CNY) 16,392 20,100 25,125 30,150

- Revenue/seat/night (CNY) 546 670 838 1,005

- Average bill/diner (CNY) 300 335 335 335

YoY % chg from FY15 12 12 12

- Average seat turns/night 1.8 2.0 2.5 3.0

Food costs (14,753) (18,090) (22,613) (27,135)

Staff costs (1,080) (1,080) (1,080) (1,080)

- No. of staff 30 Assumed 15 servers & 15 kitchen staff - Wage costs/staff/month 3,000

Gross profit (CNY'000) 33,343 41,130 51,683 62,235

Gross margin 68% 68% 69% 69%

Depreciation (1,567) (1,567) (1,567) (1,567) Assumed depreciated over lease term Rental costs (16,170) (16,170) (16,170) (16,170)

- Restaurant GFA (sq ft) 12,239

- Rental psm/month (CNY) 1,188 Assumed 2/3 of Shanghai average retail rent of CNY1,800 per sq m - Rental psf/month (CNY) 110

Utilities cost (2,459) (3,015) (3,769) (4,523)

Other opex (4,918) (6,030) (7,538) (9,045)

EBIT 8,230 14,348 22,639 30,930

EBIT margin 17% 24% 30% 34%

Net interest expense 0 0 0 0 Assumed no debt or excess cash at subsidiary level

Pretax profit 8,230 14,348 22,639 30,930

Provision for tax (2,057) (3,587) (5,660) (7,733) Assumed statutory tax rate of 25%, but should be zero due to start-up losses Minorities (2,469) (4,304) (6,792) (9,279) 30% owned by Breadtalk

Net profit (CNY'000) 3,703 6,457 10,188 13,919

Net profit (SGD'000) 788 1,374 2,168 2,961

YoY % chg from FY15 74% 175% 276%

Net margin 8% 11% 14% 15%

Return on investment 39% 69% 108% 148%

Payback period (years) 2.5 1.5 0.9 0.7

Other assumptions:

CNY to SGD FX rate 4.70

Estimated capex (CNY'000) 9,400

Capacity (no. of seats) 250

Source: Company data, Maybank Kim Eng

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Value Proposition Price Drivers

. A restaurant operator whose greatest value proposition is Revenue breakdown 1 2 3 4 ability to generate high demand for its business with reasonable prices and consistent taste. . Iconic dishes, footprint of outlets in ideal locations, strong brands and effective front- and back-end operations provide high defensible margins. . Branding and identity that hinge on signature seafood such as chilli crab, a national dish. Helps it stand out in crowded markets especially when expanding overseas. 1 . Low-cost cash business financed by suppliers’ credit. High FCF generation supports aggressive expansion plans yet provides future dividend support for shareholders.

How Jumbo stacks up on profitability & returns Source: Company, Maybank Kim Eng

Flagship brands: Avg 3Y Net Margin Jumbo - JUMBO SEAFOOD 12.0 Japan Foods - Ajisen Ramen Jumbo Japan Foods ABR - Swensen's, Gloria Jean's Coffees 10.0 Listed just in Nov 2015, trading history is too short to Soup Restaurant - SOUP BreadTalk - Din Tai Fung, Carl's Jr 8.0 identify inflexion points. We believe market will focus on its Sakae Holdings - Sakae Sushi ABR Holdings opening of new outlets in China and/or introduction of new Auric Pacific - Delifrance, Food Junction 6.0 Tung Lok - TungLok, Lao Beijing Soup Restaurant dining concepts. 4.0 Sakae Holdings 1. Second China JUMBO SEAFOOD outlet opened in Raffles BreadTalk Auric Pacific 2.0 City Shanghai in Aug 2015. 0.0 2. Third China outlet opening in IFC Mall in Jan 2016. (70.0) (60.0) (50.0) (40.0) (30.0) (20.0) (10.0) 0.0 10.0 20.0 30.0 40.0 (2.0) Avg 3Y ROE 3. Fourth China outlet assumed to open in Oct 2016. (4.0) 4. Fifth China outlet assumed to open in Oct 2017, fourth Tung Lok (6.0) JPOT outlet in Singapore assumed to open in mid-FY17 Source: FactSet estimates, Maybank Kim Eng

Financial Metrics Swing Factors

. Revenue growth. Given two new JUMBO outlets in China, Upside would expect to see increasingly stronger topline growth in next 3-4 quarters, unless other brands underperform. . Better-than-expected Singapore and China sales, . EBIT & net margins. Gross margin (excluding direct costs especially from new outlets. such as food & rental) is controllable. There may be . Lower-than-expected food and staff costs that could lead quarters of higher start-up costs where margins fall below to better-than-expected margins. trend, but generally expect good indirect cost . Expectations of higher dividends or articulation of a management and efficient tax planning. dividend policy. . Watch for deteriorating asset & liability turns. Strong FCF generation comes from AP days far exceeding AR and stock days. Don’t be alarmed if FCF is dragged down by capex. Downside

Strong revenue growth with stable margins expected . Any changes in China’s food safety laws that could affect China’s import of mud crabs. 25.0% . Shortage of critical ingredients for its signature dishes: 19% 20.0% crabs, other seafood. . Epidemics or health scares that can damage its 15% 15.0% 13% reputation or cuisine eg mass food poisoning, salmonella. 9% 10.0%

12.2% 12.3% 12.2% 13.2% 5.0% 10.4% 10.2% 9.8% 10.4%

0.0% FY15 FY16E FY17E FY18E

EBIT margin Net margin Revenue growth Source: Company data, Maybank Kim Eng estimates

[email protected]

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Jumbo Group Ltd

FYE 30 Sep FY14A FY15A FY16E FY17E FY18E Key Metrics P/E (reported) (x) 21.6 22.6 19.4 17.4 14.3 Core P/E (x) 21.6 21.0 19.4 17.4 14.3 P/BV (x) 6.1 5.1 4.6 3.9 3.2 P/NTA (x) 6.2 5.1 4.7 3.9 3.2 Net dividend yield (%) 0.0 17.9 1.5 1.7 2.1 FCF yield (%) 4.4 3.3 5.8 nm 5.0 EV/EBITDA (x) na na 10.7 9.8 7.8 EV/EBIT (x) na na 13.2 11.9 9.4

INCOME STATEMENT (SGD m) Revenue 112.4 122.8 142.9 156.1 174.0 Gross profit 61.5 66.9 79.2 86.2 98.3 EBITDA 18.6 18.5 21.5 24.2 29.2 Depreciation (3.1) (3.5) (4.0) (4.4) (4.9) Amortisation 0.0 0.0 0.0 0.0 0.0 EBIT 15.5 15.0 17.5 19.8 24.4 Net interest income /(exp) 0.0 0.1 0.1 0.1 0.1 Associates & JV 0.1 0.1 0.1 0.1 0.1 Exceptionals 0.0 0.0 0.0 0.0 0.0 Other pretax income 0.0 0.0 0.0 0.0 0.0 Pretax profit 15.6 15.1 17.7 20.0 24.5 Income tax (1.8) (1.8) (2.1) (2.5) (3.2) Minorities (0.4) (0.6) (0.6) (0.9) (1.2) Perpetual securities 0.0 0.0 0.0 0.0 0.0 Discontinued operations 0.0 0.0 0.0 0.0 0.0 Reported net profit 13.3 12.8 14.9 16.6 20.2 Core net profit 13.3 13.8 14.9 16.6 20.2

BALANCE SHEET (SGD m) Cash & Short Term Investments 47.4 60.1 68.1 63.4 73.0 Accounts receivable 5.3 6.6 7.8 8.6 9.5 Inventory 1.2 1.0 1.4 1.5 1.7 Property, Plant & Equip (net) 12.0 14.0 13.0 31.6 39.7 Intangible assets 0.8 0.8 0.8 0.8 0.8 Investment in Associates & JVs 0.4 0.4 0.5 0.6 0.7 Other assets 3.9 0.6 0.7 0.7 0.7 Total assets 71.0 83.5 92.2 107.1 126.1 ST interest bearing debt 0.2 0.2 0.3 0.3 0.3 Accounts payable 13.8 14.2 15.7 17.1 19.1 LT interest bearing debt 0.9 0.6 1.0 1.0 1.0 Other liabilities 4.0 3.0 4.0 4.0 5.0 Total Liabilities 19.0 18.3 20.7 22.5 25.1 Shareholders Equity 47.1 56.9 62.6 74.8 90.0 Minority Interest 4.9 8.3 8.9 9.8 11.0 Total shareholder equity 52.0 65.2 71.5 84.6 100.9 Perpetual securities 0.0 0.0 0.0 0.0 0.0 Total liabilities and equity 71.0 83.5 92.2 107.1 126.1

CASH FLOW (SGD m) Pretax profit 15.6 15.1 17.7 20.0 24.5 Depreciation & amortisation 3.1 3.5 4.0 4.4 4.9 Adj net interest (income)/exp 0.0 0.1 0.1 0.1 0.1 Change in working capital (1.6) (1.1) 0.1 0.6 0.8 Cash taxes paid (0.8) (2.5) (1.8) (2.1) (2.5) Other operating cash flow 0.0 0.0 0.0 0.0 0.0 Cash flow from operations 16.3 14.9 19.8 22.7 27.5 Capex (3.6) (5.5) (3.0) (23.0) (13.0) Free cash flow 12.7 9.4 16.8 (0.3) 14.5 Dividends paid 0.0 0.0 (51.7) (4.5) (5.0) Equity raised / (purchased) 0.0 0.0 45.8 0.0 0.0 Perpetual securities 0.0 0.0 0.0 0.0 0.0 Change in Debt (0.2) (0.3) 0.4 0.0 0.0 Perpetual securities distribution 0.0 0.0 0.0 0.0 0.0 Other invest/financing cash flow (4.2) 3.3 0.0 0.0 (0.0) Effect of exch rate changes 1.6 0.1 (3.3) 0.1 0.1 Net cash flow 10.0 12.6 8.1 (4.7) 9.6

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FYE 30 Sep FY14A FY15A FY16E FY17E FY18E Key Ratios Growth ratios (%) Revenue growth 15.1 9.2 16.4 9.2 11.5 EBITDA growth 46.5 (0.8) 16.4 12.5 20.8 EBIT growth 55.7 (3.1) 16.6 13.2 22.9 Pretax growth 55.6 (2.9) 16.6 13.2 22.8 Reported net profit growth 39.8 (4.5) 16.8 11.6 21.3 Core net profit growth 39.8 3.0 8.3 11.6 21.3

Profitability ratios (%) EBITDA margin 16.6 15.0 15.1 15.5 16.8 EBIT margin 13.8 12.2 12.3 12.7 14.0 Pretax profit margin 13.9 12.3 12.4 12.8 14.1 Payout ratio 0.0 nm 30.0 30.0 30.0

DuPont analysis Net profit margin (%) 11.9 10.4 10.4 10.6 11.6 Revenue/Assets (x) 1.6 1.5 1.5 1.5 1.4 Assets/Equity (x) 1.5 1.5 1.5 1.4 1.4 ROAE (%) 31.8 26.4 24.9 24.2 24.5 ROAA (%) 20.8 17.8 16.9 16.7 17.3

Liquidity & Efficiency Cash conversion cycle (75.1) (65.5) (59.3) (58.1) (59.8) Days receivable outstanding 15.9 17.5 18.2 18.9 18.7 Days inventory outstanding 6.2 7.3 6.8 7.4 7.5 Days payables outstanding 97.2 90.2 84.2 84.3 86.0 Dividend cover (x) nm 0.2 3.3 3.3 3.3 Current ratio (x) 3.2 3.9 4.0 3.4 3.5

Leverage & Expense Analysis Asset/Liability (x) 3.7 4.6 4.5 4.8 5.0 Net debt/equity (%) net cash net cash net cash net cash net cash Net interest cover (x) na na na na na Debt/EBITDA (x) 0.1 0.0 0.1 0.1 0.0 Capex/revenue (%) 3.2 4.5 2.1 14.7 7.5 Net debt/ (net cash) (46.3) (59.2) (66.9) (62.2) (71.8) Source: Company; Maybank

March 3, 2016 7

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Research Offices

REGIONAL HONG KONG / CHINA INDONESIA Surachai PRAMUALCHAROENKIT (66) 2658 6300 ext 1470 Sadiq CURRIMBHOY Howard WONG Head of Research Isnaputra ISKANDAR Head of Research [email protected] Regional Head, Research & Economics (852) 2268 0648 (62) 21 2557 1129 • Auto • Conmat • Contractor • Steel (65) 6231 5836 [email protected] [email protected] [email protected] • Oil & Gas - Regional • Strategy • Metals & Mining • Cement WONG Chew Hann, CA Suttatip PEERASUB (66) 2658 6300 ext 1430 Regional Head of Institutional Research Benjamin HO Rahmi MARINA (852) 2268 0632 [email protected] (62) 21 2557 1128 [email protected] (603) 2297 8686 [email protected] • Media • Commerce • Consumer & Auto [email protected] ONG Seng Yeow • Banking & Finance Regional Head of Retail Research Jacqueline KO, CFA Sutthichai KUMWORACHAI (65) 6231 5839 (852) 2268 0633 [email protected] Aurellia SETIABUDI (66) 2658 6300 ext 1400 [email protected] • Consumer Staples & Durables (62) 21 2953 0785 [email protected] [email protected] • Energy • Petrochem TAN Sin Mui Ka Leong LO, CFA • Property (852) 2268 0630 [email protected] Director of Research Termporn TANTIVIVAT • Consumer Discretionary & Auto Pandu ANUGRAH (65) 6231 5849 [email protected] (66) 2658 6300 ext 1520 (62) 21 2557 1137 [email protected] Mitchell KIM [email protected] ECONOMICS • Property (852) 2268 0634 [email protected] • Infra • Construction • Transport• Telcos Suhaimi ILIAS • Internet & Telcos Chief Economist Janni ASMAN Jaroonpan WATTANAWONG Stefan CHANG, CFA (62) 21 2953 0784 (66) 2658 6300 ext 1404 Singapore | Malaysia (852) 2268 0675 (603) 2297 8682 [email protected] [email protected] [email protected] [email protected] • Cigarette • Healthcare • Retail • Transportation • Small cap Luz LORENZO • Technology Philippines Adhi TASMIN (63) 2 849 8836 Warren LAU (62) 21 2557 1209 VIETNAM (852) 2268 0644 [email protected] [email protected] LE Hong Lien, ACCA [email protected] • Plantations Tim LEELAHAPHAN • Technology – Regional Head of Institutional Research (84) 8 44 555 888 x 8181 Thailand Anthony LUKMAWIJAYA [email protected] (66) 2658 6300 ext 1420 INDIA (62) 21 2557 1126 • Strategy • Consumer • Diversified • Utilities [email protected] [email protected] Jigar SHAH Head of Research JUNIMAN • Aviation (91) 22 6623 2632 [email protected] THAI Quang Trung, CFA, Deputy Manager, Chief Economist, BII Institutional Research • Oil & Gas • Automobile • Cement PHILIPPINES Indonesia (84) 8 44 555 888 x 8180 (62) 21 29228888 ext 29682 Anubhav GUPTA Luz LORENZO Head of Research [email protected] [email protected] • Real Estate • Construction • Materials (91) 22 6623 2605 [email protected] (63) 2 849 8836 [email protected] • Metal & Mining • Capital Goods • Property STRATEGY • Strategy Le Nguyen Nhat Chuyen (84) 8 44 555 888 x 8082 Vishal MODI • Utilities • Conglomerates • Telcos Sadiq CURRIMBHOY [email protected] Global Strategist (91) 22 6623 2607 [email protected] Lovell SARREAL • Oil & Gas (65) 6231 5836 [email protected] • Banking & Financials (63) 2 849 8841 [email protected] NGUYEN Thi Ngan Tuyen, Head of Retail Research Willie CHAN Abhijeet KUNDU • Consumer • Media • Cement (84) 8 44 555 888 x 8081 Hong Kong / Regional (91) 22 6623 2628 [email protected] [email protected] (852) 2268 0631 [email protected] • Consumer Rommel RODRIGO • Food & Beverage • Oil&Gas • Banking (63) 2 849 8839 MALAYSIA Neerav DALAL [email protected] TRINH Thi Ngoc Diep • Conglomerates • Property • Gaming (91) 22 6623 2606 [email protected] (84) 4 44 555 888 x 8208 WONG Chew Hann, CA Head of Research • Ports/ Logistics • Software Technology • Telcos [email protected] (603) 2297 8686 [email protected] • Technology • Utilities • Construction • Strategy Katherine TAN SINGAPORE (63) 2 849 8843 Desmond CH’NG, ACA [email protected] PHAM Nhat Bich (603) 2297 8680 Gregory YAP • Banks • Construction (84) 8 44 555 888 x 8083 [email protected] (65) 6231 5848 [email protected] [email protected] • Banking & Finance • SMID Caps Michael BENGSON • Consumer • Manufacturing • Fishery • Technology & Manufacturing • Telcos LIAW Thong Jung (63) 2 849 8840 (603) 2297 8688 [email protected] [email protected] NGUYEN Thi Sony Tra Mi YEAK Chee Keong, CFA • Conglomerates • Oil & Gas Services- Regional (65) 6231 5842 (84) 8 44 555 888 x 8084 [email protected] ONG Chee Ting, CA [email protected] Jaclyn JIMENEZ • Port operation • Pharmaceutical (603) 2297 8678 [email protected] • Offshore & Marine (63) 2 849 8842 • Food & Beverage • Plantations - Regional [email protected] Derrick HENG, CFA • Consumer Mohshin AZIZ (65) 6231 5843 [email protected] TRUONG Quang Binh (603) 2297 8692 [email protected] • Transport • Property • REITs (Office) Arabelle MAGHIRANG (84) 4 44 555 888 x 8087 • Aviation - Regional • Petrochem (63) 2 849 8838 [email protected] Joshua TAN • Rubber plantation • Tyres and Tubes • Oil&Gas YIN Shao Yang, CPA [email protected] (65) 6231 5850 [email protected] • Banks (603) 2297 8916 [email protected] • REITs (Retail, Industrial) • Gaming – Regional • Media THAILAND TAN Chi Wei, CFA John CHEONG, CFA (603) 2297 8690 [email protected] (65) 6231 5845 [email protected] Maria LAPIZ Head of Institutional Research • Power • Telcos • Small & Mid Caps • Healthcare Dir (66) 2257 0250 | (66) 2658 6300 ext 1399 [email protected] WONG Wei Sum, CFA Ng Li Hiang • Consumer • Materials • Ind. Estates (603) 2297 8679 [email protected] (65) 6231 5840 [email protected] • Property • Banks Sittichai DUANGRATTANACHAYA LEE Yen Ling (66) 2658 6300 ext 1393 (603) 2297 8691 [email protected] [email protected] • Building Materials • Glove • Ports • Shipping • Services Sector • Transport CHAI Li Shin, CFA Yupapan POLPORNPRASERT (603) 2297 8684 [email protected] (66) 2658 6300 ext 1394 • Plantation • Construction & Infrastructure [email protected] Ivan YAP • Oil & Gas (603) 2297 8612 [email protected] • Automotive • Semiconductor • Technology Tanawat RUENBANTERNG (66) 2658 6300 ext 1395 Kevin WONG [email protected] (603) 2082 6824 [email protected] • Banks & Diversified Financials • REITs • Consumer Discretionary LIEW Wei Han Sukit UDOMSIRIKUL Head of Retail Research (603) 2297 8676 [email protected] (66) 2658 6300 ext 5090 • Consumer Staples [email protected] LEE Cheng Hooi Regional Chartist Mayuree CHOWVIKRAN (603) 2297 8694 (66) 2658 6300 ext 1440 [email protected] [email protected] Tee Sze Chiah Head of Retail Research • Strategy (603) 2297 6858 [email protected] Padon VANNARAT Cheah Chong Ling (66) 2658 6300 ext 1450 (603) 2297 8767 [email protected] [email protected] • Strategy

March 3, 2016 8

Jumbo Group Ltd

APPENDIX I: TERMS FOR PROVISION OF REPORT, DISCLAIMERS AND DISCLOSURES

DISCLAIMERS This research report is prepared for general circulation and for information purposes only and under no circumstances should it be considered or intended as an offer to sell or a solicitation of an offer to buy the securities referred to herein. Investors should note that values of such securities, if any, may fluctuate and that each security’s price or value may rise or fall. Opinions or recommendations contained herein are in form of technical ratings and fundamental ratings. Technical ratings may differ from fundamental ratings as technical valuations apply different methodologies and are purely based on price and volume-related information extracted from the relevant jurisdiction’s stock exchange in the equity analysis. Accordingly, investors’ returns may be less than the original sum invested. Past performance is not necessarily a guide to future performance. This report is not intended to provide personal investment advice and does not take into account the specific investment objectives, the financial situation and the particular needs of persons who may receive or read this report. Investors should therefore seek financial, legal and other advice regarding the appropriateness of investing in any securities or the investment strategies discussed or recommended in this report. The information contained herein has been obtained from sources believed to be reliable but such sources have not been independently verified by Maybank Investment Bank Berhad, its subsidiary and affiliates (collectively, “MKE”) and consequently no representation is made as to the accuracy or completeness of this report by MKE and it should not be relied upon as such. Accordingly, MKE and its officers, directors, associates, connected parties and/or employees (collectively, “Representatives”) shall not be liable for any direct, indirect or consequential losses or damages that may arise from the use or reliance of this report. Any information, opinions or recommendations contained herein are subject to change at any time, without prior notice. This report may contain forward looking statements which are often but not always identified by the use of words such as “anticipate”, “believe”, “estimate”, “intend”, “plan”, “expect”, “forecast”, “predict” and “project” and statements that an event or result “may”, “will”, “can”, “should”, “could” or “might” occur or be achieved and other similar expressions. Such forward looking statements are based on assumptions made and information currently available to us and are subject to certain risks and uncertainties that could cause the actual results to differ materially from those expressed in any forward looking statements. Readers are cautioned not to place undue relevance on these forward-looking statements. MKE expressly disclaims any obligation to update or revise any such forward looking statements to reflect new information, events or circumstances after the date of this publication or to reflect the occurrence of unanticipated events. MKE and its officers, directors and employees, including persons involved in the preparation or issuance of this report, may, to the extent permitted by law, from time to time participate or invest in financing transactions with the issuer(s) of the securities mentioned in this report, perform services for or solicit business from such issuers, and/or have a position or holding, or other material interest, or effect transactions, in such securities or options thereon, or other investments related thereto. In addition, it may make markets in the securities mentioned in the material presented in this report. MKE may, to the extent permitted by law, act upon or use the information presented herein, or the research or analysis on which they are based, before the material is published. One or more directors, officers and/or employees of MKE may be a director of the issuers of the securities mentioned in this report. This report is prepared for the use of MKE’s clients and may not be reproduced, altered in any way, transmitted to, copied or distributed to any other party in whole or in part in any form or manner without the prior express written consent of MKE and MKE and its Representatives accepts no liability whatsoever for the actions of third parties in this respect. This report is not directed to or intended for distribution to or use by any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation. This report is for distribution only under such circumstances as may be permitted by applicable law. The securities described herein may not be eligible for sale in all jurisdictions or to certain categories of investors. Without prejudice to the foregoing, the reader is to note that additional disclaimers, warnings or qualifications may apply based on geographical location of the person or entity receiving this report. Malaysia Opinions or recommendations contained herein are in the form of technical ratings and fundamental ratings. Technical ratings may differ from fundamental ratings as technical valuations apply different methodologies and are purely based on price and volume-related information extracted from Bursa Malaysia Securities Berhad in the equity analysis. Singapore This report has been produced as of the date hereof and the information herein may be subject to change. Maybank Kim Eng Research Pte. Ltd. (“Maybank KERPL”) in Singapore has no obligation to update such information for any recipient. For distribution in Singapore, recipients of this report are to contact Maybank KERPL in Singapore in respect of any matters arising from, or in connection with, this report. If the recipient of this report is not an accredited investor, expert investor or institutional investor (as defined under Section 4A of the Singapore Securities and Futures Act), Maybank KERPL shall be legally liable for the contents of this report, with such liability being limited to the extent (if any) as permitted by law. Thailand The disclosure of the survey result of the Thai Institute of Directors Association (“IOD”) regarding corporate governance is made pursuant to the policy of the Office of the Securities and Exchange Commission. The survey of the IOD is based on the information of a company listed on the Stock Exchange of Thailand and the market for Alternative Investment disclosed to the public and able to be accessed by a general public investor. The result, therefore, is from the perspective of a third party. It is not an evaluation of operation and is not based on inside information. The survey result is as of the date appearing in the Corporate Governance Report of Thai Listed Companies. As a result, the survey may be changed after that date. Maybank Kim Eng Securities (Thailand) Public Company Limited (“MBKET”) does not confirm nor certify the accuracy of such survey result. Except as specifically permitted, no part of this presentation may be reproduced or distributed in any manner without the prior written permission of MBKET. MBKET accepts no liability whatsoever for the actions of third parties in this respect. US This research report prepared by MKE is distributed in the United States (“US”) to Major US Institutional Investors (as defined in Rule 15a-6 under the Securities Exchange Act of 1934, as amended) only by Maybank Kim Eng Securities USA Inc (“Maybank KESUSA”), a broker-dealer registered in the US (registered under Section 15 of the Securities Exchange Act of 1934, as amended). All responsibility for the distribution of this report by Maybank KESUSA in the US shall be borne by Maybank KESUSA. All resulting transactions by a US person or entity should be effected through a registered broker-dealer in the US. This report is not directed at you if MKE is prohibited or restricted by any legislation or regulation in any jurisdiction from making it available to you. You should satisfy yourself before reading it that Maybank KESUSA is permitted to provide research material concerning investments to you under relevant legislation and regulations. UK This document is being distributed by Maybank Kim Eng Securities (London) Ltd (“Maybank KESL”) which is authorized and regulated, by the Financial Services Authority and is for Informational Purposes only. This document is not intended for distribution to anyone defined as a Retail Client under the Financial Services and Markets Act 2000 within the UK. Any inclusion of a third party link is for the recipients convenience only, and that the firm does not take any responsibility for its comments or accuracy, and that access to such links is at the individuals own risk. Nothing in this report should be considered as constituting legal, accounting or tax advice, and that for accurate guidance recipients should consult with their own independent tax advisers.

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Jumbo Group Ltd

DISCLOSURES Legal Entities Disclosures Malaysia: This report is issued and distributed in Malaysia by Maybank Investment Bank Berhad (15938-H) which is a Participating Organization of Bursa Malaysia Berhad and a holder of Capital Markets and Services License issued by the Securities Commission in Malaysia. Singapore: This material is issued and distributed in Singapore by Maybank KERPL (Co. Reg No 197201256N) which is regulated by the Monetary Authority of Singapore. Indonesia: PT Kim Eng Securities (“PTKES”) (Reg. No. KEP-251/PM/1992) is a member of the Indonesia Stock Exchange and is regulated by the BAPEPAM LK. Thailand: MBKET (Reg. No.0107545000314) is a member of the Stock Exchange of Thailand and is regulated by the Ministry of Finance and the Securities and Exchange Commission. Philippines: Maybank ATRKES (Reg. No.01-2004-00019) is a member of the Philippines Stock Exchange and is regulated by the Securities and Exchange Commission. Vietnam: Maybank Kim Eng Securities JSC (License Number: 71/UBCK-GP) is licensed under the State Securities Commission of Vietnam.Hong Kong: KESHK (Central Entity No AAD284) is regulated by the Securities and Futures Commission. India: Kim Eng Securities India Private Limited (“KESI”) is a participant of the National Stock Exchange of India Limited (Reg No: INF/INB 231452435) and the Bombay Stock Exchange (Reg. No. INF/INB 011452431) and is regulated by Securities and Exchange Board of India. KESI is also registered with SEBI as Category 1 Merchant Banker (Reg. No. INM 000011708) US: Maybank KESUSA is a member of/ and is authorized and regulated by the FINRA – Broker ID 27861. UK: Maybank KESL (Reg No 2377538) is authorized and regulated by the Financial Services Authority.

Disclosure of Interest Malaysia: MKE and its Representatives may from time to time have positions or be materially interested in the securities referred to herein and may further act as market maker or may have assumed an underwriting commitment or deal with such securities and may also perform or seek to perform investment banking services, advisory and other services for or relating to those companies.

Singapore: As of 3 March 2016, Maybank KERPL and the covering analyst do not have any interest in any companies recommended in this research report.

Thailand: MBKET may have a business relationship with or may possibly be an issuer of derivative warrants on the securities /companies mentioned in the research report. Therefore, Investors should exercise their own judgment before making any investment decisions. MBKET, its associates, directors, connected parties and/or employees may from time to time have interests and/or underwriting commitments in the securities mentioned in this report.

Hong Kong: KESHK may have financial interests in relation to an issuer or a new listing applicant referred to as defined by the requirements under Paragraph 16.5(a) of the Hong Kong Code of Conduct for Persons Licensed by or Registered with the Securities and Futures Commission.

As of 3 March 2016, KESHK and the authoring analyst do not have any interest in any companies recommended in this research report.

MKE may have, within the last three years, served as manager or co-manager of a public offering of securities for, or currently may make a primary market in issues of, any or all of the entities mentioned in this report or may be providing, or have provided within the previous 12 months, significant advice or investment services in relation to the investment concerned or a related investment and may receive compensation for the services provided from the companies covered in this report.

OTHERS Analyst Certification of Independence The views expressed in this research report accurately reflect the analyst’s personal views about any and all of the subject securities or issuers; and no part of the research analyst’s compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in the report.

Reminder Structured securities are complex instruments, typically involve a high degree of risk and are intended for sale only to sophisticated investors who are capable of understanding and assuming the risks involved. The market value of any structured security may be affected by changes in economic, financial and political factors (including, but not limited to, spot and forward interest and exchange rates), time to maturity, market conditions and volatility and the credit quality of any issuer or reference issuer. Any investor interested in purchasing a structured product should conduct its own analysis of the product and consult with its own professional advisers as to the risks involved in making such a purchase.

No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior consent of MKE.

Ong Seng Yeow | Executive Director, Maybank Kim Eng Research

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Jumbo Group Ltd

Historical recommendations and target price: Jumbo Group Ltd (JUMBO SP)

4 Jan Buy : SGD0.6 0.5

0.4

0.3

0.3 Oct-15 Jan-16

Jumbo Group Ltd

Definition of Ratings Maybank Kim Eng Research uses the following rating system BUY Return is expected to be above 10% in the next 12 months (excluding dividends) HOLD Return is expected to be between - 10% to +10% in the next 12 months (excluding dividends) SELL Return is expected to be below -10% in the next 12 months (excluding dividends)

Applicability of Ratings The respective analyst maintains a coverage universe of stocks, the list of which may be adjusted according to needs. Investment ratings are only applicable to the stocks which form part of the coverage universe. Reports on companies which are not part of the coverage do not carry investment ratings as we do not actively follow developments in these companies.

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Jumbo Group Ltd

 Malaysia  Singapore  London  New York Maybank Investment Bank Berhad Maybank Kim Eng Securities Pte Ltd Maybank Kim Eng Securities Maybank Kim Eng Securities USA (A Participating Organisation of Maybank Kim Eng Research Pte Ltd (London) Ltd Inc Bursa Malaysia Securities Berhad) 50 North Canal Road 5th Floor, Aldermary House 777 Third Avenue, 21st Floor 33rd Floor, Menara Maybank, Singapore 059304 10-15 Queen Street New York, NY 10017, U.S.A. 100 Jalan Tun Perak, London EC4N 1TX, UK 50050 Kuala Lumpur Tel: (65) 6336 9090 Tel: (212) 688 8886 Tel: (603) 2059 1888; Tel: (44) 20 7332 0221 Fax: (212) 688 3500 Fax: (603) 2078 4194 Fax: (44) 20 7332 0302

Stockbroking Business:  Hong Kong  Indonesia  India Level 8, Tower C, Dataran Maybank, Kim Eng Securities (HK) Ltd PT Maybank Kim Eng Securities Kim Eng Securities India Pvt Ltd No.1, Jalan Maarof Level 30, Plaza Bapindo 2nd Floor, The International 16, 59000 Kuala Lumpur th Three Pacific Place, Citibank Tower 17 Floor Maharishi Karve Road, Tel: (603) 2297 8888 1 Queen’s Road East, Jl Jend. Sudirman Kav. 54-55 Churchgate Station, Fax: (603) 2282 5136 Hong Kong Jakarta 12190, Indonesia Mumbai City - 400 020, India

Tel: (852) 2268 0800 Tel: (62) 21 2557 1188 Tel: (91) 22 6623 2600 Fax: (852) 2877 0104 Fax: (62) 21 2557 1189 Fax: (91) 22 6623 2604

 Philippines  Thailand  Vietnam  Saudi Arabia Maybank ATR Kim Eng Securities Inc. Maybank Kim Eng Securities Maybank Kim Eng Securities Limited In association with 17/F, Tower One & Exchange Plaza (Thailand) Public Company Limited 4A-15+16 Floor Vincom Center Dong Anfaal Capital Ayala Triangle, Ayala Avenue 999/9 The Offices at Central World, Khoi, 72 Le Thanh Ton St. District 1 Villa 47, Tujjar Jeddah Makati City, Philippines 1200 20th - 21st Floor, Ho Chi Minh City, Vietnam Prince Mohammed bin Abdulaziz Rama 1 Road Pathumwan, Street P.O. Box 126575 Tel: (63) 2 849 8888 Bangkok 10330, Thailand Tel : (84) 844 555 888 Jeddah 21352 Fax: (63) 2 848 5738 Fax : (84) 8 38 271 030 Tel: (66) 2 658 6817 (sales) Tel: (966) 2 6068686 Tel: (66) 2 658 6801 (research) Fax: (966) 26068787

 South Asia Sales Trading  North Asia Sales Trading Kevin Foy Andrew Lee Regional Head Sales Trading [email protected] [email protected] Tel: (852) 2268 0283 Tel: (65) 6336-5157 US Toll Free: 1 877 837 7635 US Toll Free: 1-866-406-7447

Malaysia Thailand Rommel Jacob Tanasak Krishnasreni [email protected] [email protected] Tel: (603) 2717 5152 Tel: (66)2 658 6820

Indonesia Harianto Liong [email protected] Tel: (62) 21 2557 1177

New York India Andrew Dacey Manish Modi [email protected] [email protected] Tel: (212) 688 2956 Tel: (91)-22-6623-2601

Vietnam Philippines Tien Nguyen Keith Roy [email protected] [email protected] Tel: (84) 44 555 888 x8079 Tel: (63) 2 848-5288 www.maybank-ke.com | www.maybank-keresearch.com

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